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PUBLIC RECORD OFFICE

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Reference :-

C.O. 882

7PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH—NOT TO

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APPENDIX:

APPENDIX No. 10.

MEMORANDA by the Daro AnuUL RAHMAN, C.M.G., of Johore.

gold

My views on the question of the adoption of a standard of currency by the Straits and the adjoining Malay States, for the purpose of fixing the exchange value of the dollar, lie within a limited compass, and have referenco only to local circumstances, particularly those touching the welfare and interests of the working classes and the small traders. In the solution of any big question affecting a community, a colony, or a State, small matters have frequently to be taken into account, so that the chance of overlooking any possible side issue, however unimportant, may be avoidel.

I therefore respectfully submit that it is desirable, indeed necessary, to consider the small data with the large in the solution of this important problem.

I might say at the start that, in my opinion, the interests of the adjoining Malay States being practically identical with those of the Straits Settlements, what- ever arrangements should be mate for placing the Colony on a gold basis will in every way suit, or ought to suit, those States.

The steady fall of the dollar in the Straits has affected the natives of all classes and nationalities, and the per- manent or semi-permanent foreign residents, to a greater extent than has appeared on the surface. Speaking for the native, he has suffered by it in many ways, though the individual suffering may be a matter of degrees. "Whatever he consumes he has to pay for at an ever-increasing price-a price that grows at short intervals, from month to month, and almost from day to day. If he happens to pay for anything at an old price, it is invariably at the cost of getting an article of inferior quality for his money. This is one of the causes that has created the enormous demand for cheap goods, and these cheap goods naturally come from the cheap markets of the world,

As a distributing centre the Straits must or ought to have a fixed-price dollar-if "dollar" it must continue to be called. This is of paramount importance. The Straits centre markets (Singapore and Penang) deal with and supply the markets of practically the whole of the Malay Peninsula and Archipelago. These smaller markets are entirely in the hands of the Chinese and the natives of that region. The native traders, barterers, and brokers or middlemen, insignificant as their status may be commercially and socially, form, as a boly, an important factor in the economic prosperity of the centre market; they are one of a number of arteries leading from the heart of the local British or European import and export trade. They are not to be despised or to be left out of consideration. They are all aglow with warmth and energy when their dollar goes a long way; they are dull and sluggish when that silver coin buys less than they expect. And then there are the jungle produce collector and the native planter, who are often traders as well. They are not content with merely getting a good price in silver dollars for their produce, but they also want to know what those dollars will purchase of articles they are to take back to their little local markets. For instance, a native of an out-of-the-way litla island village comes to Singapore with $1,000 to invest in a certain article of British manufacture, and from his last visit to the emporium he expects to take back a certain quantity of that article. Say that his previous visit took place a month before, and he had not heard that the dollar in the meantime had gone down and the price of that par- ticular article had gone up; we can easily imagine his surprise and disappointment when he finds that he oan- not buy the quantity he wutta with the money he has st his disposal. His little business machinery gets out of rear, and the injury becomes worse when he confronts his clients and customers on his return. It is true that he takes back exactly the article they require, but at an

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enhanced price of 10, 15, or 20 per cent., or more, which unpopular price may have to be increased again after another visit to the centre market.

The word "exchange," in the sense it has to do with the rise and fall of the dollar (not of the metal silver), is nearly as much discussed or referred to in the small district markets and shops everywhere as it is in the European mercantile houses and stores in Raffles Square. To the customer's question why the price of such and such article is so much higher than it was when he last came to the shop, the shopkeeper's answer is invariably: "Goods have gone up in price in Europe, and the dollar has gone down." That the dollar, in a case like this, is occasionally more sinned against than Binning, is not at all impossible, but still the illustra tion serves to show that there is a strong and urgent necessity for fixity of exchange for the dollar.

The saying the old idea that a dollar is a dollar to the native, is a fallacy; it has been so for some years. There was, indeed, a time when the dollar was a dollar to the Malay, to the Straits Chinaman, the Indian immi- grant, and the Javanese coolie or domestic servant, and indeed, to all other foreigners who came to seek a líveli- hood in the Straits and the different States of the Malay Peninsula, and that was when the prices of articles of food and clothing, and also the ordinary luxuries of life -common to rich and poor-were on a normal scale, and when the value of the dollar bore a more or less fixed ratio to the English sovereign. With the increas- ing value of the sovereign, caused by the decreasing value of the dollar (which is practically an article of commerce) British and other foreign goods rise in price. and the Straits or Malayan consumer has to part with more dollars in order to procure such goods. It must be remembered that a very small proportion of food- stuffs consumed in the Straits and the adjoining States are produced locally, and as to articles of clothing, hard- ware, crockery, and glassware, they are all imported.

In a "self-providing" country say an interior pro- vince of China-the dollar still remains a dollar, and will continue so for still a long time to come. It is, therefore, easy to understand that to a great extent the Chinaman in Central China possessing a dollar is, for the time being, a much better-off man than his com- patriot with a dollar, who is earning his living in the Straits or the adjoining States, because his dollar will buy more than that of his friend the emigrant, even taking into account the cheapness of living in China. True, the latter earns a good many more dollars, but that is only because the price he gets for his work is greater than that of the man who stays at home, owing to the scarcity of labour in the place of his tem- porary abode.

As regards imported labour in the Straits and the neighbouring States, the Chinese plantation coolie geta now from $8 to $15 a month; the Javanese and Boya- nese coolie or domestic servant from $6 to $12; and the Indian (Tamil) from $5 to $10 or $11; and all thess rates of wages are gradually going up. Now are they particularly better off at the present time than at the time when their wages were respectively from 35 to $10 or $11, from $4 to $9, and from $4 to 88, when living (including clothing) was cheaper, when luxuries were fewer, and when passages to and from their own countries were less expensive, though less comfortable P

Everything has become more expensive for the Malay, so the Malay does not benefit by the fall of the dollar. The Javanese comes from a country enjoying a gold standard, so the dollar in which the price of his labour is paid in the Straits and the Malay States has to by changed into guilder for remittance, or when he takes it back to his native home. In this respect the Tamil coolie is now labouring under the same disadvantago as

COMMITTEE ON STRAITS SETTLEMENTS CURRENCY.

his Javanese confrère when he remits to India or takes his savings back with him. As I have said before, the only alien labourer whose dollar is practically safe from the "persecution" of the exchange is the Chinaman from an interior province of the Celestial Empire, when he takes it home or sends it there to some relative or friend, because the purchasing power of the dollar applied to domestic wants in his own country is the same now so it was before the decline of that coin in the Straits.

I speak of the effect of the falling dollar on small traders and the labouring classes from personal obser- vation. I can speak from personal knowledge of another class, or other classes, in a similar manner, namely, the middle and lower grade Government ser- vanta They are small in number, certainly, but all the same, they, one and all, very acutely feel the weight of the ever-growing expensiveness of living. A man who now gets $10, or $20, or $30 a month more than he did five years ago is not really better off than when he was five years younger. And, comparatively, the upper grade officials are as badly placed pecuniarily, and worse if they have to remit money to their families in England or to any "gold country.'

The merchants and storekeepers, besides enduring & similar hardship, must find it a difficult matter to regulate and execute their orders and indents. The latter part of this remark applies also, I believe, to their firms and agents at home.

The planters, both European and native, when the produce market is in their favour, do very well apparently; but expensive wages paid to their coolies, rendered necessary by the expensiveness of living ex- perienced by the coolies, and increasing cost of freight and commission, owing to the sinking dollar, nearly deprive them of the whole of the profit which they would have saved in the good old dollar time.

In the question of a fixed value for the dollar (or whatever name may be given to the coin of the highest value subsidiary to the gold sovereign) for the Straits and the neighbouring States, that of the further rail- way development both in the Colony and the adjoining countries and its attendant labour problem are in- separably involved. This is a question of vital import. ance to their continued progress and prosperity.

In the near future the Colony and the States will go in for railway construction and extensions, and for other works of public utility, in greater earnest than even at the present moment, and on this account one matter alone, viz., the problem of labour-cheap labour if possible will have to be solved. One datum for the solution of this problem lies within the limits of the sterling silver currency question. Solve this currency question first, and the labour problem can be solved after with but little difficulty if we are not discouraged by the sight of a few obstacles that lie in the way of its solution. Let this currency problem slumber, the labour question will grow more intricate day by day. I consider that it is simply suicidal for the Straits and the adjoining States to continue to go on in the spathetic and haphazard way in which they have done for the last, say, ten years as regards both labour and currency. These questions ought to have been settled long ago.

The materials for the railways and other works, and the skill required for their construction must both-for ⚫ long time to come, and perhaps always be imported from England or elsewhere where gold standard cur- rency prevails; and we have seen that the ordinary labour must also be requisitioned from countries placed on the same advantageous footing. It will not be long before China will adopt the gold standard, and Siam has already done so.

The time will soon come when the Chinese, the Tamils and the Javanese, our real labourers, will see that it is not worth their while to leave their countries for the Straits merely to earn a vanishing dollar for their labour. Those that would come under such circum- stances would only be the scum and refuse of those foreign countries, in which case we should only be in- jured by their unwelcome and unwholesome presence in our midst.

Without alien labour it would be impossible to further develop the resources of the Colony and the Malay States, and even such labour must be obtained at a compara tively cheap rate, though sufficiently high to ensure a continuous and plentiful supply. I do not think that I am very far wrong in saying that hitherto the value of the dollar has had as much to do with attracting Chiness

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and other foreign labour to the Straits and the State as the number of that coin offered in payment for such labour, and to the Asiatic labourer the value of a silver coin must be in proportion to its size, and the size of the dollar is certainly larger than the rupee or the guilder.

The long and short of this argumont is that the foreign coolie, upon whose labour we depend so much for the further development of the resources of the Colony and the States, must continue to have held out to him the same inducement that he had when he was first invited, or invited himself, to come among us, namely, a solid and a steady dollar, as well as a liberal number of that coin, as reward for his labour; and we must always remember that whether self-inviting or invited, the foreign labourer, especially the Chinaman, is the strength and pillar of our trade, and the sinew of our agricultural and mining enterprises.

As regards the Chinaman, the history of the past teaches us that it is our duty to regard him as the most important factor in any material aim we have in view, though knowing full well that he comes to us for his own good. It is this fact that ought to make us solicitous of his well-being in our midst. He, more than any other foreign labourer, is the man we have to make use of in order to ensure our further progress and welfare, while helping him to make money to take back to his own country. We must not take it for granted that because he is practically shut out of America and Australia, he must necessarily come to us. Latterly he does not seem to me to have been very anxious to do so. There may have been some good reason on his part for this, but, all the same, I think it is certain that we ought to court him more than we have done, for in spite of the comparatively few places he can go to now, we do not know what "fresh fields and pastures new he may not discover for himself, apart from the very certain fact that in the very near future he will find sufficient to do at home, and probably do well there, without the trouble of leaving his country.

Were the dollar to remain without a fixed value (and it looks very much as if the production of silver threatens to increase out of all proportion to that of gold, in which case there is no prospect of that metal taking its old place in the currency of the world), the labour problem for the Straits and the States will, in the very near future, become more difficult of solution, and we are, or ought to be, already fully aware that upon a satisfactory and permanent solution of that problem depends the continuous progress and lasting prosperity of the Colony, and its appendant neighbours and other adjoining States.

In the question of railway development alone we would, owing to the receding dollar, and the steady rise in the prices of materials, be confronted at the very outset with the question of cost. All estimates would, more or less, prove false or misguiding, because on no item of expenditure could we ever feel the certainty of having made a sufficient provision for it.

With increasing cost of materials and high-priced skilled labour on the one side, and proportionately augmenting price of manual labour on the other, the Treasury coffers of the Colonial Government and those of the Malay States Governments must not only be filled to overflowing, but they must be bottomless, in order to be able to afford to pay for an indefinite length of time for oxpensive materials and labuur of both descriptions with their present dollar.

I claim no real knowledge of any kind or description of gold standard currency, or, for that matter, of cur- rency of any other standard. But, assuming that my humble opinion is asked whether the dollar current in the Straits and the adjoining States should or should not be given a fixed value in respect of the English gold sovereign, I unhesitatingly say, "Yes, and the sooner it is done the better," and I would add that if the thing cannot be done at once permanently, give it a trial for, say, a couple of years, if such an arrangement is at all possible.

The great object to my mind is to know where we are. We want to know what the purchasing power of the dollar is, and not only what it will buy in the Colony and the States, but also what it will exactly purchase in England and, approximately, in any other country in Europe or elsewhere in the world.

I am not prepared to discuss the question from its economic or academio points, and if I should happen to have in any way touched any of these points I have done so quite inadvertently in my anxious endeavour to how certain inconvenierices and disadvantages ox-

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